US rejects WTO’S ‘straitjacket’ of trade obligations
Compiled from Dispatches
The Donald Trump administration filed another salvo at the World Trade Organization on Friday, saying US trade policy was not going to be dictated by the international body and defended its use of tariffs to pressure China and other trade partners.
A report drawn up by the US Trade Representative outlining the White House’s trade agenda for 2019 said the United States will continue to use the Switzerland-based WTO to challenge what it sees as unfair practices, Reuters reported.
However, “the United States remains an independent nation, and our trade policy will be made here – not in Geneva. We will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed,” the report said.
The United States has imposed tariffs on $250 billion worth of Chinese imports to press its demands for changes to what Washington sees as China’s unfair policies on intellectual property protections, technology transfers, industrial subsidies and domestic market access.
China has challenged the Trump administration’s tariffs in the WTO, arguing that they violate its agreed rules. The case is likely to be ultimately decided by the WTO’S Appellate Body, the world’s top trade court.
The United States must be allowed the “policy space” to address trade problems, the report said.
“That policy space must include the ability to use tariffs or other forms of leverage to persuade other countries to take our concerns seriously,” it said.
The United States has argued for years that WTO judges have routinely broken with procedures and exceeded their mandates, imposing new obligations on members.
In an effort to force reforms, Washington has routinely blocked the appointment of judges to its Appellate Body, a process that requires consensus among member states.
While Trump’s complaints have found some sympathy among other WTO members, blocking new appointments is widely opposed as it risks crippling a guardian of international law. Friday’s report did not mention US actions to block judges.
The report defended US actions to impose steel and aluminum tariffs on national security grounds, adding that national security exceptions have long been recognized at the WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT).
If the WTO were to overrule the US determination that the tariffs were essential to national security, it “would threaten serious damage to the multilateral trading system,” it said.
Tariffs on US farm products
The US president said on Friday he had asked China to immediately remove all tariffs on US agricultural products because trade talks were progressing well.
He also delayed plans to impose 25 percent tariffs on Chinese goods on Friday, as previously scheduled.
“I have asked China to immediately remove all Tariffs on our agricultural products based on the fact that we are moving along nicely with Trade discussions,” Trump said on Twitter, pointing out that he had not raised tariffs on Chinese goods to 25 percent from 10 percent on March 1 as planned, Reuters reported.
“This is very important for our great farmers – and me!” Trump added.
Farmers are a key constituency for Trump’s Republican Party, and the US president’s trade war with China has had a heavy impact on them. Beijing imposed tariffs last year on imports of soybeans, grain, sorghum and other items, slashing shipments of American farm products to China.
Trump’s post on Twitter came several hours after the US Trade Representative’s office said that it would delay the scheduled hike in tariffs on $200 billion worth of Chinese goods.
The notice, due to be published in the Federal Register next Tuesday, says it is “no longer appropriate” to raise the rates because of progress in negotiations since December 2018. The tariff would remain “at 10 percent until further notice.”
In a statement on Saturday, China said it welcomed the delay.
Speaking at a separate briefing in Beijing, a Chinese government official said both countries were working on the next steps, though he gave no details.
“China and the United States reaching a mutuallybeneficial, win-win agreement as soon as possible is not only good for the two countries, but is also good news for the world economy,” said Guo Weimin, spokesman for the high profile but largely ceremonial advisory body to China’s parliament.
The imposition of tariffs by both countries and the threat of more severe action has been a major source of global economic tension in recent months. The situation has contributed to recent large swings in equity markets, and is considered by some to be a key reason why business investment has slowed of late.